A rally in global stocks also boosted Indian stocks as investors around the world focused on a multibillion-dollar spending hike proposed by US President Joe Biden.

The National Stock Exchange’s Nifty Index recovered the record after nearly three months. The 50-stock index hit 15,469.65, breaking the previous high of 15,431.75 on February 16. The Nifty rose 97.80 points, or 0.64%, to close at 15,435.65. BSE Sensex gained 307.66 points, or 0.60%, to close at 51,422.88.

Stocks in other Asia-Pacific regions rose, led by gains in Japan, with the Nikkei advancing 2.1% while South Korea’s Kospi gained 0.73%. The New York Times reported that Biden would seek $ 6 trillion in federal spending for fiscal 2022, a day before the White House unveiled its budget proposal.

With the improving covid infection curve, India is catching up with global markets, said Naveen Kulkarni, chief investment officer of Axis Securities.

“If the government is able to completely stop the spread of the second wave of covid within 15 to 30 days, then unlock trading will play in the market, and the current rally will continue. Any delay in unlocking the economy beyond June will be a major risk in the short term, ”Kulkarni said.

Another reason to be optimistic despite the economic implications of the second wave is to wait for an announcement of a stimulus package by the government.

Bloomberg reported on May 25 that the government was preparing a stimulus package for the sectors most affected by the pandemic, aimed at supporting an economy struggling with a series of localized brakes. The finance ministry is working on proposals to strengthen the tourism, aviation and hospitality industries, as well as small and medium-sized businesses, he said.

Meanwhile, the Indian Volatility Index, or VIX, fell 12.78% to close at 17.40, indicating that investor fear is fading. “Buoyancy stems from improving conditions related to the pandemic, and also from general indications that it has indeed peaked. This gives greater certainty about the future in terms of a likely loosening of lockdowns in major cities, and also a faster return to normal, ”said Joseph Thomas, research manager at Emkay Wealth Management.

According to Tanvee Gupta Jain, an economist at UBS, the second wave of covid appears to have peaked, as the daily number of new cases and the positivity rate have plummeted in recent days. The UBS-India activity indicator slipped again to 78.6 during the week ended May 23, the slowest weekly drop since late March. The negative impact on sequential growth is less severe than in the June 2020 quarter, with lockdowns being more targeted, she said.